Americas: Peru continues to face mining-related violent unrest
Sectors: mining, energy
Key Risks: civil unrest, business interruption

In Peru, further violent unrest against China’s MMG Las Bambas copper mine in the south-central Apurimac region cannot be ruled out. On 14 October a protester was killed and several others were injured as demonstrations against the mine turned violent. Local residents in the Challhuahuacho district in Cotabambas province had blocked an access road to the mine for almost a week to protest MMG’s disregard of the approved environmental impact plan. MMG stated shipments were not affected.  Violence erupted as police tried to clear the road, leaving at least 20 police officers wounded. Mining- and energy-related socio-environmental conflicts will remain exposed to violent unrest across Peru. President Pedro Pablo Kuczynski will continue to face the challenge of balancing local communities’ demands with investors’ needs in both sectors.

Asia-Pacific: risk of unrest in Thailand grows following the death of the King
Sectors: all
Key Risks: political violence, civil unrest

The death of King Bhumibol and the succession of Vajiralongkorn risks creating a political vacuum in Thailand, which members of the pro-Thaksin Shinawatra ‘Red-Shirt’ could try to exploit. Bhumibol was supportive of the junta, which helped mute opposition towards it. However, Vajiralongkorn’s lack of popularity grants him far less ability to legitimise the regime. With the current government unelected, and elections scheduled for December 2017 likely to be delayed, it is plausible that civil unrest will grow. While protests are unlikely during the period of mourning, over the next year central Bangkok could become a focal point for unrest. While the ‘Red-Shirt’ movement may have the support base required for mass protests, the junta has significantly reduced the movement’s organisational ability, arresting its leaders and raiding its strongholds. Hard-line groups likely have limited capacity and will only be able to launch scattered low-level explosive attacks at symbolic sites.

Eurasia: risk of new Russian sanctions grows
Sectors: all
Key Risks: sanctions, credit risks,

German media reported Chancellor Angela Merkel is seeking to get junior coalition partner the Social Democrats to agree to new sanctions on Russia. The British government is also reportedly calling for additional sanctions. AKE reported the US was also considering such measures two weeks ago. Divisions within the EU make it difficult for new European sanctions to be agreed, but it is likely that existing measures will be extended. Furthermore, some EU member states have considered unilaterally expanding sanctions on Russia, a move not without precedent. The extent of US sanctions may depend on the outcome of its 8 November presidential elections. However, as a victory for Democratic candidate Hillary Clinton looks increasingly likely, fresh sanctions are expected to be significantly more stringent than existing ones given her stated support for such measures.

Europe: incumbent Milo Djukanovic’s victory paves way for NATO membership
Sectors: defence, security
Key Risks: civil unrest, war on land, SRCC

Initial results show Prime Minister Milo Djukanovic’s Democratic Party of Socialists winning 40 per cent of the vote and 36 of 81 seats in Montenegro’s parliamentary elections. Djukanovic is likely to form a coalition with Albanian, Croatian and Bosniak parties. The Social Democrats of Montenegro, who won 2 seats, could also join. Should Djukanovic form a coalition as expected, it will approve Montenegro’s accession to NATO. However, the election proved controversial given the fact that on the day of the vote Montenegrin police arrested 20 Serbian nationals. The group allegedly planned to attack state institutions and disrupt national legislative elections. Nevertheless, some have dismissed the reports as a false-flag. There have been isolated incidents of unrest, including clashes between opposition demonstrators and the police, over the past year and further incidents cannot be ruled out if Djukanovic forms a new coalition and follows through on NATO accession.

MENA: Mosul offensive marks the beginning of a new phase for Iraq
Sectors: energy, power generation, infrastructure
Key Risks: war on land, civil unrest, SRCC

Prime minister Haidar al-Abadi announced the start of the offensive to retake the Iraqi city of Mosul from Islamic State (IS) at 0138 local time (2238 GMT). Forces from different groups working as part of the coalition have been placed on separate fronts to avoid unnecessary confrontation with each other and incidents of ‘friendly fire’. IS terrorist attacks are set to increase, putting key infrastructure at risk as the offensive continues. However, key parties’ opposing interests raise the risk of prolonged political and potentially armed conflict over strategic assets in the medium term once the offensive is over. The Mosul offensive is the beginning of another chapter in Iraqi history that is likely to bring increased instability over at least the next 18 months’ to three years.

Sub-Saharan Africa: US$490m allegedly paid by Gupta family, public protector report delayed
Sectors: SOEs, banking
Key Risks: market turmoil, political risk, credit rating downgrade

South African Public Protector, Thuli Madonsela’s report into the relationship between President Jacob Zuma and the wealthy Gupta family, due to be released on 14 October was delayed. This followed Zuma’s reques to delay publication until further investigations were concluded. The report allegedly sheds light on “state capture”, government corruption and the family’s undue influence over political appointments. Meanwhile, Finance Minister Pravin Gordhan separately released a court affidavit highlighting US$490m in payments made by the family to the Treasury. Madonsela stated her report is with the Speaker of Parliament for safekeeping and will be released once the interdict appeals have been heard. The findings are likely to further dent the African National Congress’ reputation, and reignite calls for Zuma’s resignation. Given elevated political risk, South Africa is at considerable risk of a credit rating downgrade to junk.